The FTSE 100’s recent market crash may cause many investors to focus their capital on less risky investments. After all, the index is experiencing a high degree of volatility at the present time. This could persist, depending on the news flow concerning coronavirus.
However, for long-term investors, now could be a sound time to buy high-quality FTSE 100 shares. The index has a solid track record of recovery, and valuations in a variety of sectors appear to be highly attractive.
With that in mind, here are two FTSE 100 shares that could be worth buying with £2k, or any other amount, today.
Oil and gas companies such as BP (LSE: BP) have not only been hit by a slowdown in demand from reduced economic activity over recent weeks. There has also been a production dispute between Russia and Saudi Arabia. The end result has been an increase in supply in tandem with falling demand for oil and gas.
BP’s financial prospects are likely to come under pressure in the short run from lower oil and gas prices. However, the business recently updated investors on its plans to reduce costs by $2.5bn by 2021. It will also reduce its capital expenditure in the current year by 25% versus its previous guidance. These measures could help to offset the impact of falling oil and gas prices to some extent.
Investor sentiment towards BP’s shares has weakened considerably in recent weeks. For example, its share price has fallen by 32% since the start of the year. Although further declines cannot be ruled out in the short run, the company’s financial position and asset base suggest that it can deliver capital growth in the coming years. As such, now could be the right time to buy a slice of it for the long run.
While the oil price has fallen in 2020, the gold price has surged to a seven-year high. As such, precious metals miner Polymetal (LSE: POLY) could benefit from rising profitability in the current year.
The gold price may move higher over the medium term, since low interest rates make it more attractive versus income-producing assets. Unlike buying physical gold, however, purchasing shares in Polymetal provides investors with an income return of 5.2% at the present time.
Its dividend could rise at a brisk pace should profits follow the gold price higher. And with the business having a solid balance sheet, it appears to be in a good position to deliver on its investment plans.
Clearly, Polymetal is highly dependent on the price of gold when it comes to its bottom line. As such, its shares could be relatively volatile. But at a time when investor sentiment towards the FTSE 100 is highly changeable, owning a gold miner could enable investors to generate relatively attractive returns.
Peter Stephens owns shares of BP. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.